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Judicial Watch • OIS Cases FileGate-Exhibits-12

OIS Cases FileGate-Exhibits-12

OIS Cases FileGate-Exhibits-12

Page 1: OIS Cases FileGate-Exhibits-12

Category:Obtained Document

Number of Pages:5

Date Created:August 16, 1999

Date Uploaded to the Library:July 30, 2013

Tags:thought, arkansas, Whitewater, campaign, questions, political, wright, working, Commission, Bill Clinton, justice, president, michael, funds, clinton, federal, EPA, IRS, ICE, CIA

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shake Stepp's hand and-according Stepp-wouldn't let go. Look
instine ing intensely into her eyes, Clinton told her that "you really have pro come see me" Little Rock. Stepp lightheartedly tried brush him 
off. But Clinton persisted. repeated his invitation, looking closely 
view. her, continuing hold her hand even she gently tried poli remove it. just thought was coming me," concluded Stepp. "I've shaken enough politicians' hands know this was litand tle unusual." She felt unsettled enough that the newsroom the Weeks next Monday, she mentioned Broder. was sort pissed," 
delphi; Broder said later. "It was clear that whatever had happened, was out something that made her uncomfortable-and was guest." no-bid happened, Broder had breakfasted with Clinton the morn
ing after the Gridiron and remembered him saying that had just even spoken Hillary and told her all about the dinner. Was Clinton tryresist ing cover for his misstep the night before? Inside the paper, the "Ye Stepp incident made the rounds. Some thought Stepp must exagured gerating. But nobody could rule out the possibility that was weeks exactly she thought-and that Bill Clinton was stupid enough No1 have made pass Washington Post reporter. looked 
had own experiences with Clinton, more precisely his about 
operatives, that unquestionably influenced own reaction named the Jones allegations. early July 1992, had been working opmen1 lengthy story about the use private investigators political camhad se:s 
paigns. The story had been prompted reports that Ross Perot had sleazy retained detectives investigate the business dealings President Women Bush's sons. After completed it, though, had gotten tip about tabloid. similar development the Clinton campaign: Clinton operatives, .embarr was told, had hired private investigator from San Francisco who growth was flying around the country gathering "dirt" women who might being allege romantic relationships with Clinton. The gumshoe was purThe portedly being paid out campaign funds and reporting directly ladino' Betsey Wright, Clinton's longtime chief staff Little Rock. davits knew Wright: she was canny political operator who knew not Clinton's vulnerabilities better than anyone. For reasons that nobody informc: had ever been able fathom (an extremely fierce mothering mental 
ln't let go. Look1u really have 
ed-to brush him looking closely gently tried me," concluded this was lit: newsroom the sort pissed," .appened, was guest." inton the mornthat had just Was Clinton trye the paper, the must exaglity that was tupid enough precisely his own reaction working political carat Ross Perot had ngs President tip about ton operatives, Francisco who omen who might .mshoe was pur>rting directly ttle Rock. rator who knew mns that nobody .erce mothering 
instinct seemed good bet any) she had taken upon herself protect Clinton from the press-in short, make sure that his 
manifest weaknesses individual never spilled over into public 
view. She, like me, also clearly relished the spy-versus-spy dim'ension political campaigns. And she liked matching wits with reporters. 
Back March, had lunch Little Rock. She was pleasant 
and gracious but made clear she was keeping close eye me. 
Weeks earlier, had ventured down the courthouse Arka
delphia-about hour and half southwest Little Rock-to check 
out tip that prominent Clinton supporter who had landed several 
no-bid state contracts supposedly had drug record. trip yielded 
nothing support the allegation and never wrote story. had not 
even called the Clinton campaign for comment. Still, Wright couldn't 
resist letting know that her spies were everywhere. 
"You should know," she whispered one point, "I've finally fig
ured out what you were doing the Arkadelphia courthouse few 
weeks ago." 
Now, July, armed with tip about the private detective, looked forward the chance retaliate. got Wright the phone and. confronted her with information about the private detective. Much surprise, she confirmed it-and proceeded boast about it. The investigator, renowned San Francisco detective named Jack Palladino, was needed cope with alarming development: claims and about plethora women alleged have had sexual affairs with Bill Clinton. There was, Wright explained, sleazy tabloid culture that was degrading the political dialogue. 
Women-nineteen by. her count-were being pursued the tabloids, which offered juicy sums $500,000 pop tell .embarrassing stories about the Arkansas governor. ''The gold-digger growth enormous," Wright told me. "There whole industry 
being spawned." 
The campaign needed protect itself, Wright maintained. Pal. ladino's assignment was collect from the targeted women affi
davits denying any romantic relationship with Clinton. they were not cooperative, would take other steps, such gathering information that would raise questions about their credibility 
mental stability. 
UNCOVERING CLINTON asked Wright she was using Palladino for research any other topics. No, she said. don't think I've used him for anything except bimbo eruptions," she added. And with that utterance, new phrase entered the political vernacular. 
This, thought, was surely new wrinkle American politics-a paid dirt-digger whose brief was, least part, smear the reputations women romantically linked presidential candidate. one case detailed the article, Palladino had successfully suppressed story about Sally Perdue-a former Miss Arkansas who claimed have had brief fling with Clinton the fall 1983-by furnishing the National Enquirer with signed statements from former associates and estranged relatives raising questions about her veracity. story took stand whether Perdue any the others targeted Palladino were actually telling the truth; indeed, thought the story important even they were not. The payments Palladino came from campaign funds, which were federally subsi dized. Equally important, they were being laundered: the initial pay ments, totaling $28,000, were made Denver law firm, which turn passed the money Palladino's agency San Francisco. That way, only the name the Denver law firm showed financial disclosure statements filed with the Federal Elections Commission. the line where the campaign was supposed list the purpose the expenditure, officials had written simply "legal fees." 
That little bit subterfuge seemed the most significant part the Palladino story: every trivial expenditure for postage and cater ing was routinely reported Clinton's FEC report. But something truly worth knowing-the campaign's retention high-powered private detective-had been concealed. Working myself into high dudgeon, proclaimed anyone who would listen that this was outrage: Didn't the name Donald Segretti mean anything anybody around here? Didn't people have obey the campaign disclosure laws anymore? But few colleagues seemed share passion. 
Under the headline CLINTON TEAM WORKS DEFLECT .ALLEGA TIONS NOMlNEE'S PRIVATE LIFE, the Palladino story ran page July 26, 1992, two weeks after the Democratic convention New York had nominated Clinton. thought that nothing else, gave unusually Clinton and his put Palladino's toward the acti detective who woman saying The moment hopped aboard woman sign because she suf: recent brain 
But this wa: touch. With the: what was tru.e? about his sex liJ about the use irrelevant. Muc bounce. did resul appeared, the ments Pallad dent, waded tl: Federal Electio disbursed Pa the payment: .!: subterfuge. wondered: 
nside the lingered. ered that feder< that the Justice son Guaranty been operated Partners fa: opment Corpor -.. ......... ..... _., __-- ---..-
---------- --.. 
MICHAEL ISIKOFF research any him for anything .at utterance, new 
merican politics-a smear the repuential candidate. successfully supMiss Arkansas who the fall 1983-by :ments from former about her verac1r any the others truth; indeed, )t. The payments :re federally subsi!red: the initial pay. law firm, which San Francisco. That ved financial ctions Commission. 
list the purpose :al fees." significant part 
postage and cater>ort. But something high-powered myself into high :en that this was anything any
J.e campaign discloeemed share DEFLECT ALLEGAtory ran page convention New .othing else, gave unusually revealing glimpse secret political war between Clinton and his enemies over rumors about his sexual peccadillos. put Palladino's retention perspective, Wright had pointed toward the activities Larry Case, dubious Little Rock private detective who had taped thirty-eight-year-old Oklahoma City woman saying she had extended affair with Clinton the 1980s. 
The moment the Clinton campaign got wind the story, Palladino 
hopped aboard plane lahoma City-and persuaded the 
woman sign affidavit claiming she had been "tricked" Case 
because she suffered from "multiple personality disorder" triggered recent brain surgery. 
But this was not subject the press corps large wanted 
touch. With these sorts characters, who could possibly figure out 
what was true? Besides, Clinton's nomination was assured. Questions 
about his sex life seemed out bounds. Even legitimate questions 
about the use campaign funds for questionable purposes seemed 
irrelevant. Much frustration, the Palladino story got 
bounce did result, however, one modest achievement. After 
appeared, the campaign was prodded into publicly reporting its pay
ments Palladino. More than year later, after Clinton was presi
dent, waded through hundreds pages campaign reports the 
Federal Elections Commission. The total Clinton campaign funds 
disbursed Palladino had exceeded $100,000-with large chunk the payments delayed until after the election, one final layer  
subterfuge. wondered: What exactly had done for all that money? 

nside the Post newsroom, the questions about Bill Clinton's past 
lingered. the fall 1993, colleague Sue Schmidt discov
ered that federal bank examiners Kansas City had recommended 
that the Justice Department open criminal investigation into Madi
son Guaranty Trust, defunct Arkansas savings and loan that had 
been operated James and Susan McDougal, the Clintons' colorful 
partners failed real-estate venture called the Whitewater Devel
opment Corporation. The Clintons' investment Whitewater and